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ExxonMobil filed its definitive proxy statement yesterday, and – Holy Smokes! – it’s quite a read. The company devotes three full pages to a scorching diatribe against the current shareholder proposal process and those proponents and representatives whom it believes abuse that process.  Here’s a taste of what ExxonMobil had to say:

The proposal process is being abused by those who treat shareholder democracy as a venue for activism and counter-activism, from self-styled “green” or “progressive” groups to the “anti-ESG” organizations that oppose them. In recent years, ExxonMobil has seen proposals that target Board members for their public statements, cherry pick key performance indicators to be alternately used or not used by the Company, redefine risk based on each proponent’s narrow view of the energy transition, and demand dozens of often contradictory actions – all driven more by ideology than shareholder value. When these proposals come to a vote, the low shareholder support they receive makes it clear that they do not add value, except perhaps to the proponents or their representatives in driving their marketing and fundraising efforts while they advance their individual agendas.

Over the past two years, proposals have been submitted to ExxonMobil seeking more than 19 new reports – including 13 such proposals that are or were on topics the Company already covers in its reporting. Many of these prescribe metrics and approaches that are inconsistent with the realities of the Company and the industry; advance unproven and poorly defined notions of materiality; or seek reports based on narrow, remote, or unlikely future scenarios to advance a specific agenda, not to enhance shareholder value.

Many of the proponents and representatives work with each other or other activist organizations, and hijack the shareholder proposal process to advance their own agenda, which often conflicts with growing investors’ value.

ExxonMobil goes on to identify the various proponents and representatives by name and highlights their efforts to collaborate on shareholder proposals. The company concludes this part of its smackdown with the following statement: “We are increasingly seeing a number of proposals each year, backed by the same activist organizations, submitted by different named shareholders. We believe that this is a misuse of the shareholder proposal process, which is designed to allow a shareholder to submit a single proposal each year.”

The company’s lawsuit seeking to exclude proposals submitted by Arjuna Capital and Follow This – which also gets a fairly lengthy mention in this part of the proxy – already signaled that ExxonMobil was prepared to play hardball with shareholder proponents this season, and its proxy disclosure makes it clear that it isn’t backing off.

Whether ExxonMobil’s strategy is a good one is an open question, but as someone who dealt with a few very frustrating shareholder proposals and proponents in a prior life, I’d be willing to bet that drafting this disclosure must have been a truly cathartic experience for everyone involved!  (Thanks to Rhonda Brauer for tipping us off to this filing).

– John Jenkins